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Dive Brief:

Oregon Gov. Kate Brown's newly-released budget proposal does not include funding to extend the state's solar tax credit, the Portland Business Journal reports.

Without fresh budget support, the tax credit is scheduled to cease at the end of 2017, but it has support from legislative leaders who will review the budget.

In 2015 Oregon’s residential energy tax credit (RETC), which is mostly for solar systems, provided $12.2 million in tax credits, an $8 million increase from 2014.

Dive Insight:

State solar tax credits are popular and often become quickly oversubscribed, putting a strain on state budgets. That has been an issue in Louisiana, New Mexico and Utah. Oregon is now feeling the crunch.

Cutting the solar tax credit would enable a 78% budget reduction for the state Department of Energy, from $182.2 million to $40.8 million from 2017 to 2019, according the Portland Business Journal.

The state’s tax credit provides up to $6,000 for residential rooftop solar installations.

Gov. Kate Brown (D) generally supports renewable resources such as solar power, but the state is also facing a $1.7 billion budget shortfall.

The state’s residential Energy Tax credit (RETC) has support in the legislature. The co-chairs of the Joint Interim Committee on Department of Energy Oversight in June put out a draft recommendations calling for continuing the RETC “for two years or until a replacement program is adopted.”

Oregon also has an energy trust funded by utility ratepayers that provides energy rebates, but the state’s Public Utility Commission recently told the legislature that a taxpayer-funded initiative would be a better vehicle to capture the social and economic development benefits of solar installations.

The solar tax credits were not the only casualties of Brown's $20.8 billion budget proposal.

After the failure of a ballot proposal that would have raised $3 billion a year, the governor called for nearly $900 million in new revenue from tax increases and cuts to state agencies and social services to fill the $1.7 billion shortfall.